Exhibit 10.18
ENGAGEMENT AGREEMENT
THIS AGREEMENT is made the 5th day of December 2003
BETWEEN: CONSOLIDATED WATER CO. LTD.,
a Cayman Islands company having its registered office at
Trafalgar Place, West Bay Road P.O. Box 1114 GT, Grand Cayman,
B.W.I.
("the Company")
AND: FREDERICK W. MCTAGGART
of P. O. Box 321SAV, Grand Cayman, B.W.I.
("the President")
IT IS HEREBY AGREED:-
ENGAGEMENT
1. Subject to satisfaction of the condition precedent in Clause 11 on or
before December 31, 2003, the President is engaged as President and
Chief Executive Officer of the Company for three (3) years commencing
on the 1st day of January, 2004 subject to the termination provisions
set out in Clauses 18 and 19 hereof and to the extension provisions set
out in Clause 19 hereof.
REMUNERATION
2. The President's remuneration will be US$200,000.00 per annum, payable
monthly in arrears.
3. In addition, during the term of this Agreement, the Company will pay
the full cost of providing medical Insurance, as generally provided for
the Company's employees from time to time, for the President and his
immediate family.
4. In addition, during the term of this Agreement, the Company will make
contributions to a pension scheme, of the President's choice but
approved pursuant to the National Pensions Law of the Cayman Islands,
in the same manner and on the same basis as it makes contributions,
from time to time, in respect of its other employees pursuant to the
National Pensions Law.
5. The President's remuneration will be reviewed by the Company's Board of
Directors (the "Board") as of January 1st each year who may grant an
increase but shall not reduce the President's salary below the level
set out in Clause 2 hereof.
6. Further, for each completed financial year beginning with the financial
year 2004, not later than 28th February following the end of each
financial year, the President will be paid a bonus calculated as
follows;
(a) PERFORMANCE BONUS
2% of the net profit of the Company (calculated before
charging this bonus and before charging dividends or crediting
any amount accruing from the re-valuation of the Company's
assets) to a maximum of 50% of the remuneration set out in
Clause 2 (as adjusted by Clause 5); and
(b) INCREMENTAL BONUS
5% of the amount, if any, by which the net profits (calculated
as in clause 6(a)) of the Company for that financial year
exceeds the highest annual net profit earned by the Company in
any prior financial year.
The aggregate of the Performance Bonus and the Incremental Bonus, if
any, calculated aforesaid shall be paid as to 75% in cash and, subject
to approval of the members of the Company at the Company's next annual
general meeting, as to 25% in ordinary shares of the Company valued at
the market price at the close of trading of the same on December 31st
of the relevant financial year (or if such day is not a trading day, at
the close of trading on the preceding trading day). If such approval is
not obtained, the aggregate of the Performance Bonus and the
Incremental Bonus shall be paid entirely in cash.
RESPONSIBILITIES
7. The President's work will be performed mainly in West Bay, Grand
Cayman.
The Company reserves the right to transfer the President to any other
place of business which it may establish in the Cayman Islands.
The Company will provide the President with a motor vehicle which, in
the sole opinion of the Company, is suitable for the discharge of the
President's duties hereunder.
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8. The President shall devote substantially the whole of his time as is
necessary to perform his functions hereunder and shall use his best
endeavors to promote the Company's interests and welfare.
The President shall perform the duties commonly performed by a
President/Chief Executive Officer of a publicly listed company and also
the duties reasonably required of and assigned to him by the Board
which he shall discharge in accordance with directions of the Board.
Without limiting the generality of the foregoing, the President shall
serve on the board of directors of such subsidiaries or affiliates of
the Company as the Board may direct.
The President shall perform his duties under this Agreement during
normal business hours from Monday to Friday inclusive (save on bank
holidays) but he accepts that his duties, which include traveling on
the Company's business both within the Cayman Islands and abroad, may,
from time to time, require work to be undertaken on Saturdays, Sundays
and bank and public holidays.
The President shall report to the Board, diligently follow and
implement all management policies and decisions which the Board
communicates to him, prepare and forward in a timely manner all reports
and accountings the Board requests and generally be responsible for the
effective operation of the Company in accordance with pre-agreed
financial and operating budgets.
The President shall not directly or indirectly engage in any activities
or work which are deemed by the Board to be detrimental to the best
interests of the Company.
9. In case of inability to work due to illness or injury, the President
shall notify the Company immediately and produce a medical certificate
for any absence longer than ten working days.
10. The President is entitled to up to ten (10) days sick leave per year
without a medical certificate.
11. This Agreement is conditional upon the President undergoing a medical
examination in such form as is usual and customary in the Cayman
Islands, the results of which demonstrate to the Board's satisfaction
that the President is capable of performing the responsibilities set
forth in Clauses 7 and 8. The Company will meet the cost of such
medical
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examination, or any amounts not covered by the Company's health
insurance plan.
HOLIDAYS
12. The President is entitled, during every calendar year to the following
holidays during which his remuneration will continue to be payable:-
(a) all public holidays in the Cayman Islands, and
(b) four (4) weeks vacation to be taken at a time to be approved
by the Board.
REIMBURSEMENT OF EXPENSES/FEES EARNED
13. (a) All expenses for which the President claims reimbursement
shall be in accordance with any policies established by the
Board from time to time and shall be within the operating
budgets approved by the Board. The Company shall reimburse the
President for the costs incurred by the President in his
performance of the Capacity on production of the necessary
vouchers or, if he is unable to produce vouchers, on the
President proving, to the Board's satisfaction, the amount he
has spent for those purposes.
(b) All fees and payments received by the President for or in
relation to acting as director or officer of a subsidiary or
affiliate of the Company shall be the property of the Company
and the President shall account to the Company for the same.
NON-COMPETITION
14. The President agrees, as a separate and independent agreement, that he
will not during any period for which he has been remunerated hereunder,
whether for his own account or for the account of any other person,
firm or company during the term of this Agreement, either alone or
jointly with or as manager, agent for or employee of or as consultant
to any person, company or firm, directly or indirectly, carry on or be
engaged or concerned or interested in any person firm or entity who
conducts business identical to or similar to that conducted by the
Company in any jurisdiction in which the Company carries on business
(whether directly or indirectly).
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COMPANY INFORMATION, DOCUMENTS, CONFIDENTIALITY, AND NON-SOLICITATION
15 (a) All information, documents, books, records, notes, files,
memoranda, reports, customer lists and other documents, and all copies
of them, relating to the Company's business or opportunities which the
President keeps, prepares or conceives or which become known to him or
which are delivered or disclosed to him or which, by any means come
into his possession, and all the Company's property and equipment are
and will remain the Company's sole and exclusive property both during
the term of this Agreement and after the termination or expiration
hereof;
(b) If this Agreement is terminated for any reason, or if the
Company at any time requests, the President must promptly
deliver to the Company the originals and all copies of all
relevant documents that are in his possession, custody or
control together with any other property belonging to the
Company, provided, however, that should the President require
access to copies of such documents for any reasonable purpose,
the Company shall provide the same at his request;
(c) The President shall not, at any time during the term of this
Agreement or after it's termination or expiration, either for
his own account or for the account of any other person, firm
or company, solicit, interfere with or endeavour to entice
away from the Company any person, firm or company who, at any
time during the currency of this Agreement were employees,
customers or suppliers of or were in the habit of dealing with
the Company.
16. Except where such information is a matter of public record or when
required to do so by law, the President must not, either before or
after this Agreement ends, disclose to any person any information
relating to the Company or its customers of which he becomes possessed
while acting as President.
TERMINATION
17. This Agreement shall terminate and, except to the extent previously
accrued, all rights and obligations of both parties under it shall
cease if any of the following events occurs:-
(a) The President dies.
(b) The President is adjudicated bankrupt or makes any arrangement
or composition with his creditors.
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(c) On the 31st of December of any year in which the Company does
not extend the term of this Agreement in accordance with
Clause 19 hereof.
(d) The President gives six (6) months written notice of
termination to the Company.
18. (a) The Company may, by written notice, terminate this Agreement
with immediate effect if the President conducts himself in a
manner that would justify immediate dismissal of an employee
in accordance with the Labour Law and, except to the extent
previously accrued, all rights and obligations of both parties
under this Agreement shall cease.
(b) If through physical or mental illness, the President is unable
to discharge his duties for sixty (60) successive days, as to
which a certificate by any doctor appointed by the Company
shall be conclusive, the President shall be relieved of his
duties and his salary shall be reduced to US$1,000.00 per
annum and his bonus entitlement suspended, and the Company
shall continue to pay the full cost of providing medical
insurance for the President and his immediate family together
with pension contributions (such contributions to be based on
the pension contribution made on behalf of the President for
the previous financial year of the Company) for a period of
two years at which time his employment shall be terminated.;
EXTENSION
19. On or before June 30th of each year during the term of this Agreement
(or any extension thereof), the Board shall determine whether to extend
the term of this Agreement, and if the Board so determines, the term of
this Agreement shall be extended such that the term shall be for three
(3) years from January 1st of the next following year.
In the event that the Board determines not to extend the Agreement in
any year, the term of the Agreement shall expire on December 31st of
that year and the Company, on that date, shall pay to the President, in
cash, twice the annual remuneration as set out in Clause 2 as adjusted
by Clause 5 hereof.
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NOTICES
20. Any notice to be served under this Agreement must be in writing and
shall be deemed to be duly served if it is handed personally to the
Secretary of the Company or to the President as the case may be, or if
it is sent by registered post to the address at the head of this
Agreement. A notice sent by post shall be deemed to be served on the
third day following the date on which it was posted.
PREVIOUS AGREEMENTS SUPERCEDED
21. This Agreement supersedes all prior contracts and understandings
between the parties save that benefits earned or accrued under prior
contracts shall not be extinguished or affected except that the words
"average closing market price of the Company's Ordinary Shares on each
of the first seven trading days in the month of October" in Clause 5 of
the Engagement Agreement dated July 12, 2000 shall be replaced with the
words "closing market price of the Company's Ordinary Shares on
December 31st" as they relate only to the options granted pursuant to
that Engagement Agreement in respect of the calendar year 2003.
No change or attempted waiver of any of the provisions hereof shall be
binding unless in writing and signed by the party against whom it is
sought to be enforced.
HEADINGS
22. The headings herein are included for convenience only and have no legal
effect.
APPLICABLE LAW AND JURISDICTION
23. This Agreement shall be construed and the legal relations between the
parties determined in accordance with the laws of the Cayman Islands to
the jurisdiction of the courts of which the parties hereby agree to
submit. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid. If any
provision of this Agreement or the application of it is prohibited or
is held to be invalid, that prohibition or invalidity shall not affect
any other provision, or the application of any other provision which
can be given effect without the invalid provision or prohibited
application and, to this end, the provisions of this Agreement are
declared to be severable.
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EXECUTED FOR AND ON BEHALF OF CONSOLIDATED WATER CO.
CONSOLIDATED WATER CO LTD. LTD.
BY:
IN THE PRESENCE OF:
/s/ illegible /s/ Rick Finlay
- ---------------------------------- -----------------------------------------
WITNESS DIRECTOR
EXECUTED BY FREDERICK W. MCTAGGART
IN THE PRESENCE OF:
/s/ Tracey Ebanks /s/ Frederick McTaggart
- ---------------------------------- -----------------------------------------
WITNESS FREDERICK W. MCTAGGART
Tracey Ebanks
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